Gome Retail Holdings Limited · HKEX:493
Gome Retail — 9M 2017 Earnings Presentation
36 slides from Gome Retail's earnings presentation, November 2017
Slide 1: 2017 First Nine Months Results Announcement
2017 First Nine Months Results Announcement November 2017
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) which have been prepared by GOME Retail Holdings Limited (“GOME” or the “Company”) do not constitute any offer or invitation to purchase or subscribe for any securities, and shall no t form the basis for or be relied on in
Slide 3: Content
Content 1. Financial Highlights 2. GOME“Home·Living” • Scenarios based on the Concept of“Home·Living” • Internet technologies empowered GOME’s new retail • Combined upgraded supply chain with smart production • Enhanced after-sales services by self-owned logistic platform 3. Appendix 3
Slide 4: 2017 First Nine Months Operating Matrix
2017 First Nine Months Operating Matrix* Shared GMV RMB 1 billion Total GMV: Online GMV: Offline GMV: RMB 34.2 billion RMB 94.3 RMB 60.1 billion billion 20% Growth YoY Mobile GMV Increased 79% YoY Mobile GMV Accounts for 75% of Total Online GMV * The financial information disclosed in this presentat
Slide 5: 2017 First Nine Months Financial Highlights
2017 First Nine Months Financial Highlights* Sales Revenue RMB 57.43 billion YoY Growth 3.7% Comparable Store Sales RMB 35.39 billion YoY Growth 2.9% Consolidated Gross Profit Margin 17.0% YoY Up 1.0 percentage point EBITDA RMB 1.05 billion YoY Growth 42.5% Operating Profit RMB 434 million YoY Growt
Slide 6: Key Financial Indicators
2017 First Nine Months Financial Highlights - Key Financial Indicators Sales Revenue Growth (YoY) Operating Expense Ratio 18.7% 15.0% 17.2% 11.4% 16.3% 16.3% 15.9% 15.7% 7.8% 3.7% 1H16 9M16 FY16 1H17 9M17 1H16 9M16 FY16 1H17 9M17 Consolidated Gross Profit Margin Net Profit Margin 17.8% 0.45% 17.0% 0
Slide 7: Content
Content 1. Financial Highlights 2. GOME“Home·Living” • Scenarios based on the Concept of “Home·Living” • Internet technologies empowered GOME’s new retail • Combined upgraded supply chain with smart production • Enhanced after-sales services by self-owned logistic platform 3. Appendix 7
Slide 8: "Home · Living" Strategic Transformation
“Home · Living” Strategic Transformation Driven by the “Electrical Appliance + Home Decoration + Household Product + Home Service” segments, a “Home ·Living” ecosystem is built based on the core of home, so as to facilitate the strategic development of GOME in tapping the immense potential of “home
Slide 9: GOME's Strategic Layout of "Home · Living"
GOME’s Strategic Layout of “Home · Living” Evolved from a traditional home appliance retailer to “Electrical Appliance + Home Decoration + Household Product + Home Service”One-Stop Service Provider Adding Home Decoration to the product offer Driving the sales of related products and services Home de
Slide 10: Cooperation with Home Decoration Companies
Cooperation with Home Decoration Companies GOME Invested RMB356 million in “iKongjian”, a Home decoration business has been introduced into physical standardized home decoration company stores in Beijing, Zhejiang, Hangzhou and Chengdu Home decoration business recorded over RMB200 million Expected t
Slide 11: Diversified Entertainment and Leisure Stores
Diversified Entertainment and Leisure Stores Established home decoration and household experience store based on the strategy and concept of “Home and Living” Baking Classroom VR Theatre Smart Device Park eSports Comic and Net-caféand Online Animation Center Games 11
Slide 12: Market Penetration
Market Penetration China’s Offline Home Appliance Market 2016 Develop the county-level cities and expand to surrounding areas gradually Unit: RMB ‘000 million Combine “Internet + Physical Stores” to achieve stable profitability 3,500 3,321 Self-operated stores as principal, supplemented by franchise
Slide 13: Contents
Contents 1. Financial Highlights 2. GOME "Home ·Living" • Scenarios based on the Concept of“Home·Living” • Internet technologies empowered GOME’s new retail • Combined upgraded supply chain with smart production • Enhanced after-sales services by self-owned logistic platform 3. Appendices 13
Slide 14: GOME New Retail Ecosystem
GOME New Retail Ecosystem Empowering online and offline retail business with internet technology Building GOME’s New Retail Eco-system to achieve retail technology development Closed Loop of Customer Online Offline Traffic Connecting Members, Services, and Products Standardized Product Product + Exp
Slide 15: Empower GOME Retail with Internet Technology
Empower GOME Retail with Internet Technology Empowering physical stores and after-sales services with technology Using big data to drive the refined operations of stores and users “Delivery + Installation” Demographics Monitoring Services Enhanced Services in Stores Hot Item Maps E-warranty Card Int
Slide 16: New Retail – Integration of Online and Offline
New Retail – Integration of Online and Offline By creating new omni-channel shopping experiences for users, growth of offline and online orders have become stable In 2017Q3, revenue of offline from APP self-checkout accounted for more than 30%, with a monthly growth rate exceeding 40% YoY ＋ Online p
Slide 17: Socialnomics – ME Shop
Socialnomics – ME Shop By creating a super APP for rebate Establish a sharing retail platform through rebate and ME Shop partnership program GMV of sharing retail platform has reached RMB1 billion, while ME Shop has started to boost in Q3, with GMV reaching RMB 300 million, up 683% YoY Recommendatio
Slide 18: Contents
Contents 1. Financial Highlights 2. GOME "Home ·Living" • Scenarios based on the Concept of“Home·Living” • Internet technologies empowered GOME’s new retail • Combined upgraded supply chain with smart production • Enhanced after-sales services by self-owned logistic platform 3. Appendices 18
Slide 19: Empower Supply Chain with Big Data
Empower Supply Chain with Big Data Supply chain with vertical expansion – satisfying customers' needs for quality, personalized and smart products Customised technical products to satisfy customers' demands C2M Household and Big data to drive Reverse smart products with accurate choice of customizat
Slide 20: GOME's Smart Self-owned Brand
GOME’s Smart Self-owned Brand Building “GOME Cloud” through “product (hardware) + smart control (software) + cloud platform” to develop intelligent electrical appliances for providing better smart home products and services Total of 28 Registered Patents and Patent under Comparison in Gross Profit M
Slide 21: Contents
Contents 1. Financial Highlights 2. GOME "Home ·Living" • Scenarios based on the Concept of“Home·Living” • Internet technologies empowered GOME’s new retail • Combined upgraded supply chain with smart production • Enhanced after-sales services by self-owned logistic platform 3. Appendices 21
Slide 22: Increase Self-owned Logistics Capacity
Increase Self-owned Logistics Capacity Continuous optimization of the China’s leading medium to large parcel warehousing system Logistic Network Coverage Set up Self-owned Warehouses Logistic Network Coverage: Cities 95.5%，Counties Warehouses under construction: Xi'an, Shenyang, Ningbo, 91.0%，Vi
Slide 23: Elevate Standard of Logistics Services
Elevate Standard of Logistics Services Increase home appliance market barriers by fully promoting “Delivery + Installation” logistics services Provide a model “Delivery + Installation” service for Extend “Delivery + Installation” services to air TV to form a logistic system with technical conditioni
Slide 24: Empowering After-Sales Services with Internet of Things
Empowering After-Sales Services with Internet of Things Establish IOT. Product technology to drive technical connection with manufacturers and database, created the first function in China of One- button maintenance appointment reservation; Committed to providing caring smart services for customers,
Slide 25: Smart Platform for After-Sales Services
Smart Platform for After-Sales Services To establish a smart after-sales service ecosystem with the support of “delivery + installation” monitoring services, integrated “delivery + installation”, delivery with big data distribution, customer services etc., Information e-Services Service Smart Custom
Slide 26: Contents
Contents 1、Financial Highlights 2. GOME“Home·Living” • Scenarios based on the Concept of“Home·Living” • Internet technologies empowered GOME’s new retail • Combined upgraded supply chain with smart production • Enhanced after-sales services by self-owned logistic platform 3、Appendices 26
Slide 27: Income Statement Summary
Income Statement Summary （RMB in million） 9M2016 9M2017 YoY Change Revenue 55,390 57,429 3.7% Consolidated gross profit 8,875 9,790 10.3% Consolidated Gross Profit Margin 16.0% 17.0% 1.0 p.p. Operating Profit 167 434 159.9 % Operating Profit Margin 0.3% 0.8% 0.5 p.p. Profit Before Tax 198 156 (21.2)
Slide 28: Financial Position
Financial Position （RMB in million） As of 31 Dec 2016 As of 30 Sep 2017 Change Financial Position Cash & Cash Equivalents 13,237 13,166 (0.5)% Pledged Deposits 5,383 7,769 44.3% Pledged Deposit Ratio (exclude DGPOL) 30.4% 31.2% 0.8 p.p. Inventories 11,606 12,210 5.2% Inventory Turnover Days* 62 66 4
Slide 29: Consolidated Gross Profit Margin
Consolidated Gross Profit Margin （RMB in millon） 9M2016 9M2017 RMB in million Revenue 55,390 57,429 17.0% 16.0% Consolidated Gross Profit 8,875 9,790 2.1% 2.1% 0.6% Consolidate Gross Profit Margin 16.0% 17.0% 0.6% Gross Profit from Supplies 13.3% 14.3% Other Income and Gains 2.7% 2.7% 8,875 9,790 14
Slide 30: Store Indicators
Store Indicators Period-end Sales Area Average Quarterly Sales Per Store ‘000 sq. meter RMB in million 11.2 12.0 9.7 9.4 9.9 5,428 5,265 5,226 5,182 5,208 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Quarterly Sales Per Sqm Same-store Sales Growth and Comparable Number of Stores RMB 3,657 8.5%
Slide 31: Tier 1 & 2 Market Revenue Breakdown
Tier 1 & 2 Market* Revenue Breakdown In Jan- Sep 2017 Tier-1 market sales up 3.1% YoY，Tier-2 market sales up 5.4% YoY Sales Ratio of Tier-1 & Tier-2 Markets* Tier-1 & Tier-2 Market* Sales RMB in millions 43,176 41,866 75.6% 75.2% 24.4% 24.8% 13,524 14,253 Tier 1&2 cities Tier 3&4 cities Tier 1&2 cit
Slide 32: Sales Revenue By Region
Sales Revenue By Region First Nine Months 2017 Revenue： RMB57.43 billion First Nine Months 2016 Revenue： RMB55.39 billion 49% 46% 14% 13% 9% 9% 8% 7% 6% 6% 7% 6% 6% 5% 4% 5% Beijing Shanghai Guanghzou Xi'an Shenzhen Chengdu Jinan Others 9M2016 9M2017 32
Slide 33: Revenue & Gross Profit Margin by Category
Revenue & Gross Profit Margin by Category Revenue by Category 19% 18% 19% 19% 20% 20% 17% 18% 14% 14% 8% 8% 3% 3% AV Air-con Fridge & Tel-com Small appliances Computer Digital & Others Washing Machine Gross Profit Margin by Category 18.6% 15.8% 16.2% 17.0% 14.8% 15.3% 13.7% 14.5% 9.7%10.5% 9.4%9.6%
Slide 34: Nationwide Store Network
Nationwide Store Network China As of 30 Sep 2017 GOME Dazhong Cellstar Artway Group Total Paradise Flagship stores 197 35 24 - 104 360 Standard stores 302 39 17 - 134 492 Specialized stores 382 58 5 44 251 740 Total 881 132 46 44 489 1592 Among： T1 Market 464 88 37 37 249 875 T2 Market 417 44 9 7 24
Slide 35: Top Suppliers
Top 5 Suppliers 9M2017 GOME Top 5 Suppliers 44.3% 9.9% 9.5% 9.2% 8.2% 7.5% Haier Midea Apple Gree Huawei Top Five Suppliers 9M2016 GOME Top 5 Suppliers 41.6% 9.3% 8.9% 8.3% 7.6% 7.5% Haier Midea Samsung Gree Apple Top Five Suppliers 35
Slide 36: Thank You
Thank You